Most crypto enthusiasts are looking forward to the launch of bitcoin trading platform Bakkt. The official launch is scheduled for 23 September 2019. Within 48 hours of publishing this news, bitcoin surged by 10 percent.

Launching the Bakkt platform is important for bitcoin for 3 reasons:

1. Bakkt will settle the payment for futures contracts in bitcoin

For the first time in the history of cryptocurrencies, a platform will be available which offers futures where buyers can expect physical bitcoin. This means that the Bakkt firm has to take out huge amounts of bitcoin from circulation. There will be less bitcoin in the market and this will guarantee its higher price. Currently, futures contracts are settled in a way that, after the expiry of the purchased contracts, market participants pay or get the difference in a foreign currency, e.g. in dollars.

2. Bakkt will enable investments into bitcoin even for institutional investors

With Bakkt, institutional investors gain a platform for investing into bitcoin even though they are normally excluded from such investments. This is because the ICE-operated company secured approval from the Commodity Futures Trading Commission (CFTC) and the New York Department of Financial Services (NYFDS). All the investments carried out through Bakkt are fully legal.

3. Bakkt will simplify conversions and enable crypto payments even for people who do not own bitcoin

Bakkt has focused on the use of bitcoin as a reliable payment solution. So far, Bakkt has collaborated with Starbucks in creating a template for a cost-effective system to process low-volume payments by bitcoin. In the current system, Bakkt immediately converts the cryptocurrency into fiat money. Consequently, buyers do not have to go through a lengthy exchange process. In addition, merchants do not have to worry about market volatility because they get the payments in fiat money.

With this system, even those who do not own any bitcoin can carry out purchases easily and use bitcoin for paying for goods. This will probably attract more Bakkt users, which would increase demand for bitcoin. Bakkt would thus create an upward cycle of demand.

Bakkt provides a platform for institutional investors to buy physical bitcoin through its legally compatible system. Moreover, the ICE-owned company offers a framework where even people who do not own cryptocurrencies can use them as a payment solution.